It was pretty much a nothing day at the New York MercantileExchange on Friday, as the spot June contract could only move 2.2cents lower to settle the day at $2.178. Trading was limited to atight 4 cent range.

One broker said June is currently at a crossroads, although thecontract could cross those roads as early as today. “There is asmall bottom rising wedge formation on the chart that is currentlylending technical support at $2.165-17, pretty much near [Friday’s]settle. If June opens at $2.17 or lower [Monday], you could seesome technical selling drive this thing all the way down to a testof support at $2.11,” he said.

Several reports were released last week that may shed some lighton the long run fundamental picture. According to a study releasedby the Washington International Energy Group, enough nuclearcapacity will be shut down over the next five years to allow thenatural gas industry to add up to a potential of 1.55 Tcf/year moreof the electric generation market (see “Nuclear Closings to Open Up1.55 Tcf Market, Study Says”, NGI 5/18). However, while severalsources surveyed by GPI agree nuclear generating capacity shoulddecline during this time period, one in particular feels the 1.55Tcf estimate is probably “way overstated.”

Even if the figure does prove to be correct, data released bythe Energy Information Administration (EIA) suggests enoughcapacity should exist to handle that supply. In its report entitledDeliverability on the Interstate Natural Gas Pipeline System, theEIA showed that natural gas pipelines reached an all-time high of30.7 Tcf/year of capacity in 1997, with a total utilization rate of75%. The report can be accessed here.

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